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Business Development
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Industrial Revenue Bond (IRB) Program Volume Cap Application and Allocation Process The following steps comprise a basic outline of the process for applying for an allocation of the Department's volume cap for industrial revenue bond projects. All applicants should consult with bond counsel on meeting all of the applicable State and Federal requirements.
1) Meet with Commerce Area Development Manager Manufacturers who are interested in utilizing industrial revenue bond financing for their expansion projects need to meet with the Area Development Manager who represents the project location. Area Development Managers assist business expansions and promote business retention in their respective territories. Any business that wants to apply for an allocation of volume cap must submit to the Department of Commerce a completed Prospect Data Sheet through an Area Development Manager. The Prospect Data Sheet includes information on the business and the expansion project.Staff will review the Prospect Data Sheet and the project to develop a recommendation on volume cap allocation. The evaluation of the project is based on many criteria including job creation and retention, the amount of private investment, the creation of new taxable property, the economic distress of the project area, the financial soundness of the business, and the ability of the borrower to service the debt. Staff will contact a representative of the business to discuss the project in detail, as part of the review. The review can take one to two weeks to complete following the receipt of the Prospect Data Sheet. 3) Volume Cap Allocation Offer If volume cap allocation is approved, the business will receive a letter from the Department of Commerce indicating the amount of volume cap and other conditions that the Department has determined must be met. One of the conditions is that the Department must receive a signed letter from a financial institution indicating a commitment to purchase or place the bonds. The Department certifies or reserves an allocation of volume cap for approved projects for a total of 90 days from the certification date, provided that if the bonds are not sold within 30 days, a deposit of 0.5% of the approved allocation (1.0% on or after October 1) is submitted to the Department. The deposit is refundable following the bond closing. It is forfeited if the bonds are not sold. A notice of the bond closing must be filed with the Department within five business days from the date of the closing. The notice should include the following information: Buyer/underwriter; type of sale (public or private); term; and interest rates. A fee equal to 0.10% of the amount of the bond issue must also be submitted with the notice. |
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